Nogger's Blog

11/06/15 -- Soycomplex: Beans closed lower, with Brazil's CONAB adding to the bearish tone created by yesterday's USDA report. They raised their estimate for the 2014/15 Brazilian soybean crop from 95.07 MMT to a new record 96.04 MMT, which is now more than 1.5 MMT above what the USDA gave us just yesterday and 11% above last year's production. The Rosario Grain Exchanged chipped in with a 2014/15 Argentine production estimate of 60.1 MMT, which is also above yesterday's 59.5 MMT offering from Washington. MDA CropCast were unchanged on their forecast for the world soybean crop in 2015/16 at 302.72 MMT, a small decline on this season of 0.7 percent. The see the US crop at 3.8234 billion bushels, and have next year's output in Brazil at 98.3 MMT (another new record) and forecast production in Argentina at 57.01 MMT (they have this season's crop above both the Rosario Exchange and the USDA at 60.45 MMT). Not to be outdone, the Buenos Aires Grain Exchange raised the bar on Argentina even higher, releasing a new 2014/15 soybean crop estimate of 60.8 MMT, adding that the harvest is now 96.6% complete. The Argentine government said that farmers there are 41.3% sold on this year's soybean crop versus 36.9% sold a year ago. A Bloomberg survey into trader/analyst sentiment found 6 bullish, 10 bearish and 5 neutral on bean prices. A bit of support came from the USDA reporting weekly export sales on old crop beans of 164,000 MT, along with new crop sales of 389,300 MT. Pre-report estimates had been for 100,000–200,000 MT on old crop beans and 350,000-400,000 MT on the new crop. Weekly old crop meal sales were also towards the high side of the range at 129,700 MT. There were also new crop meal sales of 49,900 MT. Jul 15 Soybeans closed at $9.40, down 9 1/2 cents; Nov 15 Soybeans closed at $9.08 3/4, down 13 cents; Jul 15 Soybean Meal closed at $313.40, down $1.00; Jul 15 Soybean Oil closed at 33.29, down 58 points.

Corn: The corn market closed around a cent or so easier. CONAB increased their forecast for the 2014/15 Brazilian corn crop from 78.59 MMT to 80.21 MMT, now a marginal increase on last year. The Buenos Aires Grain Exchange were unchanged on their forecast for the 2014/15 Argentine corn crop at 25.0 MMT. Harvesting is 40.7% complete, they said. The Argentine government said that farmers there are 49.7% sold on this year's corn crop versus 40.8% sold a year ago. MDA CropCast estimated the world 2015/16 corn crop at 961.1 MMT, up 1.19 MMT from a week ago. Their forecast for this year's US corn crop was unchanged at 13.802 billion bushels, down 3.9% on a year ago. Russia's crop was hiked 1.22 MMT to 12.7 MMT. On the US weather front "the forecast is suddenly very wet, calling for above average rainfall in Midwest corn and soybean farms in the upcoming week. How much rain is too much? Midwest farms have received surplus rainfall over the past 2 weeks, turning fields soggy. Ponding has developed in the low-lying areas, submerging corn and soybeans. While ponding is not widespread, it may become so with above-average rains predicted in the week ahead," said Martell Crop Projections. "The current swath of moisture covering the bulk of the Midwest is expected to pour nearly 4” – 5” of rain over the next 5 days," added Benson Quinn. Weekly US export sales of 495,600 MT for delivery in 2014/15 were up 7 percent from the previous week, but down 14 percent from the prior 4-week average, said the USDA. New crop sales of 115,500 MT were also reported. Weekly corn shipments were just over 826,000 MT, the lowest volume seen since the end of March. Tonight's close keeps the new crop soybean:corn price ratio around the 2.43:1 mark that it has been fairly steady at for the last few weeks. A Bloomberg survey into trader/analyst sentiment found 7 bullish, 10 bearish and 4 neutral on corn prices. Jul 15 Corn closed at $3.56 1/2, down 3/4 cent; Dec 15 Corn closed at $3.74 1/4, down 1 cent.

Wheat: The wheat market closed lower, in a general hangover from yesterday's USDA report. Weekly export sales weren't too thrilling to kick off the new 2015/16 marketing year at 376,700 MT. That, combined with the news that US wheat was comfortably priced out in today's Egyptian tender, whilst not exactly a surprise, simply further re-enforced the view that US wheat is too expensive to make inroads into all but traditional US homes. US SRW wheat was offered at $227.67/tonne versus the winning bid of $190.50/tonne for Russian wheat, and freight of course is also far cheaper from Russia too. CONAB cut their forecast for the 2015 Brazilian wheat crop from 7.05 MMT to 6.76 MMT. The Argentine government said that farmers there are 78.5% sold on this season's wheat crop versus 55.3% sold a year ago. The Buenos Aires Grain Exchange said that good weather had allowed Argentine growers to get 22.1% of their 2015/16 winter wheat crop sown. They estimated plantings at 4.1 million ha. The Rosario Exchange are even more pessimistic, saying that these could fall to only 3.5 million ha. That would match the USDA's estimate for plantings in 2013/14, and that was the lowest since at least 1960. The USDA cut their forecast for Argentine wheat plantings from 4 million ha to 3.8 million yesterday. Pakistan said that their 2015/16 wheat crop had come in at 25 MMT, up 0.5 MMT on last year. Taiwan tendered for 97,000 MT of US wheat for Aug/Sep shipment. MDA CropCast estimated the world wheat crop up 1.27 MMT from a week ago at 711.8 MMT. They raised their outlook on US winter wheat by 23 million bushels to 1.553 billion bu. Russia's crop was raised 1.6 MMT to 55 MMT and Ukraine's was increased 0.84 MMT to 22.8 MMT. The USDA's FAS in Ukraine said that this year's wheat production prospects had improved substantially. MDA CropCast cut their outlook on this year's Australian wheat crop by 1.36 MMT to 23.1 MMT. A Bloomberg survey into trader/analyst sentiment found 6 bullish, 9 bearish and 5 neutral on wheat prices. Jul 15 CBOT Wheat closed at $5.04 1/4, down 9 1/4 cents; Jul 15 KCBT Wheat closed at $5.23 1/4, down 7 1/4 cents; Jul 15 MGEX Wheat closed at $5.62 3/4, down 4 1/4 cents.